Conroy v Carter [1968] HCA 39; (1968) 118 CLR 90 (25 June 1968)

HIGH COURT OF AUSTRALIA

CONROY v. CARTER [1968] HCA 39; (1968) 118 CLR 90

Constitutional Law (Cth) - Bylaws and Regulations

High Court of Australia
Barwick C.J.(1), McTiernan(2), Kitto(3), Taylor(4), Menzies(5) and Windeyer(6) JJ.

CATCHWORDS

Constitutional Law (Cth) - Taxation power - Prohibition on discrimination between States or parts of States - General law not operating uniformly - Severability - The Constitution (63 & 64 Vict. c. 12), s. 51 (ii.) - Poultry Industry Levy Collection Act 1965-1966 (Cth), ss. 5, 6 (1).*

Bylaws and Regulations - Validity - Regulation made between passing of Act and commencement - Effect of amending regulations to validate previous regulations - Acts Interpretation Act 1901-1966 (Cth), s. 4 - Poultry Industry Levy Collection Regulations (Cth), reg. 4.

HEARING

Sydney, 1967, October 17, 18 ; 1968, June 25. 25:6:1968
APPEAL from the Court of Petty Sessions, Werribee, Victoria.

DECISION

1968, June 25
The following written judgments were delivered:-
BARWICK C.J. The circumstances giving rise to this appeal from the orders of informations laid against the respondent and the arguments by which those orders have been sought to be justified, are fully set out in the reasons for judgment prepared by my brother Taylor, which I have had the opportunity of reading. (at p95)

2. I have also had the advantage of reading the reasons for judgment prepared by my brother Menzies. Iagree with the conclusions reached by my brother Menzies and with his reasons for them, and, except as to the validity of s. 6 (1.) (b) of the Poultry Industry Levy Collection Act 1965-1966 of the Commonwealth, I also agree with the reasons and conclusions of my brother Taylor. (at p96)

3. Accordingly, upon the arguments raised in this appeal, I am of opinion that the order of the magistrate should be set aside and the informations remitted to him to be dealt with according to law. (at p96)

McTIERNAN J. I am of the same opinion as the Chief Justice. (at p96)

KITTO J. I agree in the judgment of my brother Taylor. (at p96)

TAYLOR J. This is an appeal from the order of a magistrate which dismissed two informations by which it was alleged that the respondents, being the owners of hens kept for commercial purposes, had between certain specified dates failed to furnish information to the Secretary of the Egg and Egg Pulp Marketing Board for the State of Victoria as required by reg. 4 of the Poultry Industry Levy Collection Regulations made pursuant to the Poultry Industry Levy Collection Act 1965-1966 (Cth). (at p96)

2. The informations were dismissed, it seems, because the magistrate took the view that ss. 5 and 6 of the Act were invalid, and that since reg. 4 could be justified only as a provision in aid of those sections, it was invalid also. But we are told that the course the proceedings took before the magistrate was that the appellant, who was the informant, tendered two certificates under the hand of the Secretary of the Board certifying that on certain relevant dates the respondents were the owners of hens kept for commercial purposes at Greaves St., Werribee, and that they had failed to furnish to the Board, within two weeks of certain relevant dates, a notice in writing required to be furnished by them under reg. 4 containing the information required to be furnished in respect of hens kept by them on the relevant dates. Regulation 8 provides, in effect, that the Secretary of the Board may give such a certificate and that it shall be evidence of the facts stated but, objection having been taken to their tender, the two certificates were not admitted in evidence and the informations were dismissed. In effect, the respondents' contentions concerning the validity of ss. 5 and 6 of the Act were argued on the objection taken to the admission of the certificates, and the magistrate, having upheld these contentions, rejected the certificates. Whether or not the certificates would have been admissible if ss. 5 and 6 and reg. 4 were properly held to be invalid we need not inquire, for it is common ground that the material question to be decided is whether reg. 4 is valid. (at p96)

3. Section 10 (1.) of the Act provides that a person shall not fail or neglect to furnish a return or information that he is required under the regulations to furnish, and a penalty is imposed for a breach of this provision. Regulation 4, then, proceeds to require that an owner of hens kept for commercial purposes in a State shall, within two weeks after a day on which levy is imposed in respect of hens so kept, furnish, by notice in writing, to the State Egg Board for the State, information as to the number of hens so kept by him on that day. The Regulation also requires that certain other information, which it is unnecessary for the purpose of this case to refer in detail, shall also be furnished. But to understand the principal contention advanced on behalf of the respondent it is necessary to say that the Act (s.4) provides that the levy, which is imposed by the Poultry Industry Levy Act 1965, is payable upon the expiration of the prescribed period after the day on which the levy is imposed. In general, it seems, the prescribed period is fourteen days. Then, the critical provisions appear in ss. 5 and 6 (1.) and (2.). These sections are as follow:

"5 (1.) For better securing the payment of levy, the
Commonwealth may enter into an arrangement with a State
with respect to the collection of levy in that State, on behalf
of the Commonwealth, by the State Egg Board for that State.
(2.) Without prejudice to the generality of the last preceding
sub-section, an arrangement under that sub-section with a
State may provide for -
(a) the keeping by the State Egg Board for that State of
accounts and records in relation to amounts of levy
collected by the Board;
(b) the payment by the State Egg Board to the Commonwealth
of amounts of levy collected by the Board;
(c) the furnishing by the State Egg Board to the Minister
of information with respect to amounts of levy collected
by the Board and of amounts paid by it to the
Commonwealth;
and
(d) the inspection and audit of the accounts and records kept
by the State Egg Board with respect to amounts of levy
collected by the Board."
"6 (1.) While an arrangement under the last preceding
section between the Commonwealth and a State is in force -
(a) payment of an amount of levy that is payable in respect
of hens kept in that State shall be made to the State Egg
Board for that State; and
(b) the State Egg Board for that State may retain out of
any moneys payable by the Board to any person an
amount not exceeding the amount of any levy that the
person is liable to pay.
(2.) Where, under the last preceding sub-section, a person
pays an amount of levy to the State Egg Board for a State
or an amount in respect of levy is deducted by the State Egg
Board for a State from moneys payable by the Board to a
person, the person is, to the extent of the amount so paid or
deducted, discharged from his liability to pay the levy to
the Commonwealth." (at p98)

4. An arrangement of the type contemplated by s. 5 was made by the Commonwealth with the State of Victoria on 1st July 1965 as appears from the Poultry Levy (Collection Arrangement) Act, 1965 (Vict.), by which the arrangement was ratified. A copy of the arrangement is set out in the schedule to the Act and it provides that the State shall cause, and make all necessary provision for, the Egg Board to collect, on behalf of the Commonwealth, the levy from time to time payable in respect of hens kept in the State (cl. 2). Clause 3 provides that: (at p98)

5. "For the purposes of the collection of levy in accordance with this arrangement, the Board shall be required to -

(a) be responsible for ensuring that all persons by whom
levy is payable are made aware of their liability in that
respect;
(b) take all necessary steps for returns or information relating
to levy to be furnished in accordance with the
requirements
of the Commonwealth;
(c) take all reasonable steps to ensure that persons who are
liable to pay levy do, in fact, pay the levy; and
(d) keep appropriate accounts and records of the amounts
of levy that from time to time are payable or have been
collected and of the persons by whom the levy is payable."

By the arrangement the Board is bound to pay to the Commonwealth the amounts of levy that have been collected (cl. 4), and as far as practicable, amounts of levy shall be paid by the Egg Board to the Commonwealth in respect of each prescribed period within seven days from the date the levy became payable upon the expiration of the prescribed period. It is unnecessary to refer to other provisions of the arrangement. It also appears from the Second Schedule to the Poultry Industry Levy Collection Regulations that there are in existence in each of the various States, authorities answering the description of a State Egg Board, but the evidence in the case does not show whether like arrangements have been made by the Commonwealth with all of these authorities. (at p99)

6. In these circumstances it is contended that ss. 5 and 6 of the Poultry Industry Levy Collection Act are invalid because, being laws with respect to taxation, they are beyond the Commonwealth Parliament's legislative power with respect to taxation in that their effect is to discriminate "between States". The test of discrimination, it is asserted, is whether the impugned sections deal differently with different States, and it matters not whether the discrimination is substantial or not; it is sufficient if there is discrimination in this sense. (at p99)

7. The basis for this contention, it is suggested, is to be found in the observations of Isaacs J. in R. v. Barger [1908] HCA 43; (1908) 6 CLR 41 , and in Cameron v. Deputy Federal Commissioner of Taxation (Tas.) [1923] HCA 4; (1923) 32 CLR 68 where he said (1923) 32 CLR, at p 76 : "My opinion as to the true meaning of the constitutional provision in s. 51 (ii.) was fully expressed in R. v. Barger (1908) 6 CLR, at pp 105-111 , and to that opinion I refer. I would, however, repeat one sentence, which was relied on in this case by both sides, in order that I may apply it to the present circumstances. At p. 110 I said: 'Discrimination between localities in the widest sense means that, because one man or his property is in one locality, then, regardless of any other circumstance, he or it is to be treated differently from the man or similar property in another locality.'" In a later case to which we were referred - Deputy Federal Commissioner of Taxation v. Brown [1958] HCA 2; (1958) 100 CLR 32 - Dixon C.J. said (1958) 100 CLR, at p 39 : "Section 51 (ii.) with its prohibition of discrimination may not be the same as art. 1, s. 8 of the Constitution of the United States requiring uniformity but what the Supreme Court has said about State law in the collection of federal taxes seems to me to be true of our system. 'The provision' of the Constitution 'exacting uniformity throughout the United States itself imports a system of assessment and collection under the exclusive control of the general government': United States v. Snyder [1893] USSC 160; (1893) 149 US 210, at p 214 (37 Law Ed 705, at p 707) ." But it is important to notice that in Cameron's Case [1923] HCA 4; (1923) 32 CLR 68 the Court was concerned with regulations made under the Income Tax Assessment Act 1915-1918 (Cth) and that these regulations purported to prescribe differential values to be taken into account for the purpose of ascertaining the taxable income of taxpayers in each State and that the only line of demarcation provided by the regulations for the application of the differential values was constituted by the boundaries of the various States. And as Starke J. said in the same case "a law with respect to taxation which takes as its line of demarcation the boundaries of States . . . necessarily discriminates between them" (1923) 32 CLR, at p 79 . That case and Barger's Case [1908] HCA 43; (1908) 6 CLR 41 are quite unlike the present case, as also was the case of United States v. Snyder [1893] USSC 160; (1893) 149 US 210 (37 Law Ed 705) from which Dixon C.J. quoted the observation mentioned above. The last-mentioned case was concerned with the question whether a lien on property for United States tax created by Congress was subject to a State law which provided that "No mortgage or privilege on immovable property shall affect third persons, unless recorded or registered in the parish where the property is situated, in the manner and within the time as is now or may be prescribed by law, except privileges for expenses of last illness, and privileges for taxes, state, parish, or municipal." The State law also provided that such privilege should lapse in three years. It was in the course of disposing of this question that the Supreme Court made the observation which I quote fully: "Moreover, it scarcely seems necessary to look beyond the Constitution itself for a decisive reply to the question we are now considering. The 8th section of the 1st article declares that 'the Congress shall have power to lay and collect taxes, duties, imposts and excises, . . . but all duties, imposts, and excises shall be uniform throughout the United States'. The power to impose and collect the public burthens is here given in terms as absolute as the language affords. The provision exacting uniformity throughout the United States itself imports a system of assessment and collection under the exclusive control of the general government. And both the grant of the power and its limitation are wholly inconsistent with the proposition that the States can by legislation interfere with the assessment of Federal taxes, or set up a limitation of time within which they must be collected" (1893) 149 US, at p 214 (37 Law Ed, at p 707) . It will be seen that the decision throws no light on questions which arise for consideration in the present case. But a later case in the Supreme Court of the United States - Knowlton v. Moore [1900] USSC 127; (1900) 178 US 41 (44 Law Ed 969) - is, perhaps, somewhat closer. There it was said, speaking of an inheritance tax, "The tax is hence uniform throughout the United States, despite the fact that different conditions among the States may obtain as to the objects upon which the tax is levied. The proposition in substance assumes that the objects taxed by duties, imposts and excises must be found in uniform quantities and conditions in the respective States, otherwise the tax levied on them will not be uniform throughout the United States. But what the Constitution commands is the imposition of a tax by the rule of geographical uniformity, not that in order to levy such a tax objects must be selected which exist uniformly in the several States" (1900) 178 US, at p 108 (44 Law Ed, at p 996) . So it was held in later cases that a federal inheritance tax which permitted the deduction of a like tax paid to a State did not lack uniformity because one State levied no tax (Florida v. Mellon [1927] USSC 7; (1927) 273 US 12 (71 Law Ed 511) and Gottlieb v. White (1934) 69 F (2d) 792 and 292 US 657 (78 Law Ed 1505) ). But the requirement of the Constitution of the United States is that "all duties, imposts and excises, shall be uniform throughout the United States" and not, as in the case of the Commonwealth Constitution, that laws with respect to taxation shall not discriminate between States. (at p101)

8. However, in my view, a law with respect to taxation cannot, in general, be said so to discriminate if its operation is general throughout the Commonwealth even though, by reason of circumstances existing in one or other States, it may not operate uniformly. Such a law is s. 72 (1.) of the Income Tax Assessment Act 1936- 1966 (Cth) which provides, inter alia, that sums for which the taxpayer is personally liable and which are paid in Australia by him in the year of income for land tax imposed under any law of the State shall be allowable deductions. This is a provision which operates generally throughout the Commonwealth and the fact that in some States there may be no legislation imposing land tax does not mean that it discriminates between States. (at p101)

9. The present case, however, is concerned with legislation of a somewhat different character. There can be no doubt that there is no discrimination in the constitutional sense in the manner in which the impost is imposed or in the method of its calculation; the rate of the levy is uniform throughout the Commonwealth and, by s. 9 of the Poultry Industry Levy Collection Act, the amount of levy that is payable may be recovered by the Commonwealth as a debt due to the Commonwealth. But the Commonwealth, being a body corporate must, if it is to be collected, collect the levy through its servants or agents. And it cannot be suggested that a law which provided that levies due in New South Wales should be paid to the Deputy Commissioner of Taxation in New South Wales, and that those due in Western Australia should be paid to the Deputy Commissioner of Taxation in that State, discriminates between States. Likewise there could be no objection on this ground if an Act provided that the levies accruing due should be payable at any branch of the Commonwealth Bank even if in one State the Commonwealth Bank should have no branches. Section 5 of the Act contemplates the making of arrangements between the Commonwealth and State Egg Boards for the collection of the tax by the various Boards as agents for the Commonwealth and I can see no reason why its validity should be doubted. Indeed no reason was advanced for the contention that it is invalid; rather the argument centred round s. 6. But s. 6 (1.) (a) does no more than provide a method by which a person who is bound to pay a levy to the Commonwealth may discharge his indebtedness; it merely provides that, while an arrangement contemplated by s. 5 is in force, payment of an amount of levy that is payable in respect of hens kept in that State shall be made to the State Egg Board for that State. It is a provision which is general in its operation but the fact that it will have no application in States where an arrangement contemplated by s. 5 is not in force does not constitute any reason for suggesting that it is a discriminatory provision. However, greater attention was paid in argument to s. 6 (1.) (b) which provides that a State Egg Board may retain out of any moneys payable by the Board to any person an amount not exceeding the amount of the levy that a person is liable to pay. It was suggested that, if in some only of the States an arrangement of the nature contemplated by s. 5 is in force, this sub-section has the effect of imposing an additional substantial disadvantage on the taxpayer. That is to say that in those States moneys due to him may be withheld in satisfaction of the amount due and payable by him in respect of the levy. But in my view such a provision does not involve discrimination between States. A comparable provision may be found in s. 254 of the Income Tax Assessment Act 1936-1966 which authorizes and requires an agent, as defined, to retain out of any money which comes to him in his representative capacity so much as is sufficient to pay the tax which is or will become due in respect of income. In my view neither of the subsections of s. 6 can be said to discriminate between States; they merely provide for the manner in which a liability for the levy may be discharged. And if, by reason of the fact that in one or more States there is not in existence an arrangement of the character referred to in s. 6, they are incapable of application in those States. But this does not mean that there is any discrimination in the constitutional sense. In any event, however, even if s. 6 (1.) (b) should be thought to be invalid, a decision to this effect would not advantage the defendants for it would still leave standing s. 6 (1.) (a) and this would be sufficient to sustain reg. 4. (at p102)

10. A further objection was taken to the validity of reg. 4 on the ground that the Regulations which first prescribed the rate of levy were made on 18th June 1965, whilst the Act under which they purported to have been made, whilst assented to on 28th May 1965, did not by reason of s. 2 thereof come into operation until 1st July 1965. But this objection is answered by reference to s. 4 of the Acts Interpretation Act which, despite the arguments advanced to the contrary, quite clearly authorized the making of such a regulation between the passing of the Act and its commencement. Further, the form in which the amendments to those Regulations have been made from time to time, and before the events which gave rise to the prosecution, operated, in my view, to repromulgate the Regulations in the amended form. (at p103)

11. In my view the order of the magistrate should be set aside and the matters remitted to him in order that he may dispose of them according to law. (at p103)

MENZIES J. The requirement of s. 51 (ii.) of the Constitution that laws with respect to taxation must not discriminate between States or parts of States does not mean that such laws must operate with complete uniformity throughout the Commonwealth. This is clear from a comparison between s. 51 (ii.) and s. 51 (iii.). The latter provision requires bounties to "be uniform throughout the Commonwealth". Nor does s. 51 (ii.) require that taxation laws must operate uniformly throughout the States of the Commonwealth ; had this been meant it would no doubt have been said in language similar to that used in s. 51 (iii.). (at p103)

2. What the more elaborate provisions of s. 51 (ii.) forbid is a taxation law which would impose a taxation burden upon a person because of some connexion with a State or a part of a State, which would not fall upon other persons not having that connexion. Furthermore, in determining whether a law imposes such a discriminatory burden, it is to the law itself that attention must be paid, not to the laws of any State or States. (at p103)

3. The only provision in the Poultry Industry Levy Collection Act 1965-1966 (Cth) that could have such a discriminatory operation is s. 6 (1.) (b). Section 6 (1.) (a) was impugned but I have no doubt that the Parliament is not obliged to make a uniform tax payable to one collector and that different collectors of such a tax may be appointed in different States. Section 6 (1.) (b) does, however, expose a person liable to pay an amount of levy in respect of hens kept in a State with which the Commonwealth has made an arrangement pursuant to s. 5 of the Act, to a particular disadvantage at law to which a person in respect of hens kept in a State which has made no arrangement with the Commonwealth under s. 5, is not exposed, namely the retention of the levy out of moneys owing by a State Egg Board to the taxpayer. I am disposed to think that this differentiation amounts to an unlawful discrimination. (at p104)

4. I am satisfied, however, that having regard to s. 15A of the Acts Interpretation Act 1901-1957 (Cth) the invalidity of s. 6 (1.) (b) of the Poultry Industry Levy Collection Act 1965-1966 (Cth) could not affect the validity of any other provision of that Act. Nor could the invalidity of s. 6 (1.) (b) by itself affect the validity of the Poultry Industry Levy Collection Regulations. (at p104)

5. Accordingly I think the magistrate was wrong in rejecting the certificates tendered in accordance with reg. 8 of the aforesaid Regulations on the ground that the regulation was invalid because of the invalidity of s. 6 (1.) (b). (at p104)

6. As to the other matters, I agree with the judgment of Taylor J. and I agree too with the order which his Honour proposes. (at p104)

WINDEYER J. I entirely agree in the conclusions of Taylor J. and in the order he proposes. (at p104)

ORDER

Appeal allowed with costs. Order appealed from set aside. Informations remitted to the Court of Petty Sessions at Werribee to be heard and determined according to law.

Solicitor for the appellant, H. E. Renfree, Crown Solicitor for the Commonwealth.

Solicitors for the respondents, Cooke & Cussen.
R. A. H.